GBP/EUR: Tuesday 9:00 UTC 31st August: 1.16502
The GBPEUR was higher last week after a bounce from the sell-off the week before. After peaking to yearly highs two weeks ago, the rate is now steadily trading around the 1.165 mark, which seems to be well priced as virus levels continue to rise in the UK. German GDP figures came in at 1.6% growth, which although higher than initial estimates, ING bank analyst Carsten Brzeski has said its economic rebound has been undermined by supply chain frictions, and is now a bigger risk to the German economy than Covid-19. Germany will also see inflation and employment data released this week. Inflation soared to 3.9% last month, and is expected to drop slightly. The UK has seen virus-related fatalities the highest it has been since March, and Sterling could be at serious risk with rising virus rates heading into Winter.
GBP/USD: Tuesday 9:00 UTC 31st August: 1.37723
The Pound was also a lot higher against the Dollar last week. Fed Chair, Jerome Powell's stance on tapering bond buys is wavering. Despite previously mentioning that slowing its $120 billion/month purchase programme may be appropriate this year, he has said that the Delta Covid-19 variant is undermining current recovery. Whilst he also clarified raising interest rates is certainly not in the picture, this sent the Dollar down 0.48% against Sterling in a matter of minutes on Friday, and is only beginning to stabilize now. Covid-19 rates still remain worryingly high in the UK after the bank holiday weekend, whilst the country grapples with Brexit complications as supply shortages begin to take hold, this could send Sterling down from its very quick recent gains over the Dollar.
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